Tag Archives: crisis
Rest of UK expected to catch up with London and South East price growth in 2015
In 2015 UK regions outside of London and the South East of England will catch up on the property price growth that has topped the market this year, according to agents. The National Association of Estate Agents (NAEA) predicts that in 2015 London and the South East will show slower growth in terms of price. With stamp duty reforms now in place, agents are hoping for greater supply in the market nationwide as there's more encouragement for people to buy and sell houses. ‘Areas outside London and the South East, where the market has been slow in terms of volume and price, will hopefully catch up with London and the South East in the next year,’ said Mark Hayward, NAEA managing director. He pointed out that currently supply in terms of construction is too low to be able to meet housing market demands. ‘Although the number of new homes being built has risen, and the three main political parties have created large new build targets, the lack of capacity within the market means that the gap between supply and demand won’t close and we currently don’t have the resources to respond to the problem,’ he added. Agents also believe that the general election will cause uncertainty, whichever party is likely to come in to power and with the housing market being based solely on sentiment, any uncertainty may result in a temporary lull. However, Hayward said the general feeling is that this will have long lasting implications on the market. He also mentioned the expected interest rate rise next year. ‘At present it’s anticipated to rise in the latter part of 2015, and the Bank of England feels this will have little effect on current mortgage holders and first time buyers. However, our research among NAEA members suggests the impending rate rise will influence demand, with 70% of agents already reporting signs of demand dropping. It is likely that the imminent rate rise will continue to affect demand, as well as affordability,’ added Hayward. David Cox, managing director of the Association of Residential Letting Agents (ARLA), explained that supply is also low in the private rented sector. ‘Simply put, we need more houses. Demand continues to outstrip supply. As new homes come on to the market at one end from both foreign investors and landlords in London and South East who are buying up portfolios in the north of the country we’re also seeing accidental landlords leaving the sector at the other end,’ he said. ‘However, even… Continue reading
UK surveyors report a resurgence in remortgage activity
November saw a resurgence in remortgaging activity even as the rest of UK housing market cooled, according to the latest research from Connells Survey and Valuation. Remortgaging was the most robust sector of the housing market and performed well both on a monthly and annual basis. The total number of remortgaging valuations conducted in November increased by 10% compared to October, and by 3% compared to November last year. ‘Remortgaging is defying the rest of the market. With the base rate set to remain low well into 2015, it is clear that this is driving demand,’ said John Bagshaw, corporate services director of Connells Survey & Valuation. ‘Lenders continue to offer even more competitive mortgage rates, while many households are using this opportunity to remortgage and reduce their monthly payments,’ he added. By contrast, the total number of valuations for all purposes fell 5% on an annual basis. This is a considerable improvement from a steeper drop of 10% over the 12 months to October 2014. On a monthly basis property valuations remained static since October. According to the firm November saw a marked shift in sentiment with more lenders and borrowers opting for a tone of caution. ‘Regulatory changes continue to impact other sectors of the market, especially first time buyers with restrictions on lending. On the other hand, the low base rate has powered demand for remortgaging, and to a lesser extent, buy to let,’ explained Bagshaw. ‘While this year the total number of valuations fell by 5% compared to last year, this annual figure compares favourably with historic data and exceeds the number of valuations recorded in November 2012, 2011 and 2010. With so many variables in play it remains to be seen whether this points to a cooling market in 2015 or if this is part of the usual festive seasonal trend,’ he pointed out. Buy to let also performed well compared with the rest of the market. On a monthly basis, the number of buy to let valuations dipped 5% since October and by 1% compared to the previous November. The sector is supported by an array of low LTV products and lenders have become more focused on low risk borrowers, such as landlords who typically have lower LTVs and multiple streams of income, according to the firm. As a proportion, first time buyer valuations now make up under a third of total activity at 28%. In terms of numbers this area of the market was down the most on an annual basis with a fall of 11% and also dipped 7% compared to the previous month. The number of valuations for owner occupiers moving home saw the second fastest annual fall, down 9% compared to November last year. However, on a month on month basis this sector of the market saw no change. ‘Recent policy changes such as loan… Continue reading
UK buy to let sector confident going into 2015, new research suggests
Confidence in the buy to let market will encourage significant investment in the sector by UK property investors in 2015, according to new research. This is despite the fact that 52% of buy to let property investors believe interest rates will rise next year, the report from specialist buy to let business Platinum Property Partners also shows. While the majority expect an increase, overall 42% believe interest rates will rise by less than 2% and only 10% expect to see interest rates rise by 2% or more. However, 29% cited a rise in interest rates as their biggest concern for 2015. An interest rate rise of any size would make buy to let borrowing more expensive, this hasn’t slowed down landlords’ ambitions as 43% of existing landlords intend to grow their portfolio of rental properties next year. Some 23% intend to expand their portfolio by one and 14% say they will purchase two more rental properties in the next 12 months. Landlords owning Houses in Multiple Occupation (HMOs) for young professionals and key workers have some of the biggest ambitions for 2015 with 52% planning to add to their portfolio during 2015, 29% planning to add two properties and 14% will add three. The survey also found that landlords still feel confident about capital growth despite recent reports that the housing market is slowing. While the Council of Mortgage Lenders (CML) point to a dip in mortgage lending as evidence that there has been a ‘plateau’ in housing market activity, landlords are confident that house price growth will continue during the course of the next five years. Just under half, 49%, expect UK property values to climb by up to 10% over this period, while a further 28% of investors predict an increase of 10% or more. HMO landlords have an even more positive outlook for capital growth with 43% saying property prices will increase by 10% or more, some 15% more than the overall average. None of the HMO landlords surveyed expect house prices to decrease in the next five years. However, UK buy to let investors have some concerns about what 2015 may bring. When asked for their number one concern, an increase in interest rates topped the poll at 29%, closely followed by future changes in laws and legislations for landlords at 26%. A further 9% are most concerned about the impact of a change of government ahead of the general election and 20% have absolutely no current concerns. ‘A rise in interest rates is one of landlords’ main concerns for 2015, yet the majority don’t anticipate that these rises will be dramatic or unaffordable. As a result, our research reveals that the sector will continue to grow next year, with two in five planning to add to their portfolio despite a likely interest rate rise,’ said Steve Bolton, PPP chairman. ‘Investors in HMOs show the greatest intention to increase their portfolios, which reflects the fact that HMOs… Continue reading
